Data released by the US Federal Reserve has revealed that while consumer credit exceeded expectations for growth in August, credit card usage fell for the third consecutive month.

Following an annual increase rate of 5.5% in August, the figures showed an increase in consumer credit of $13.6bn to $3tn, a value well above that previously forecast.

However, the registered upward trend in consumer credit proved to be far from universal.

The Federal Reserve reported figures for both revolving and nonrevolving credit, finding that the former decreased at an annual rate of 1.25%, while the latter increased at an annual rate of 8%.

Revolving credit, a type of credit which is not repaid through a fixed number of payments and primarily measures credit-card use, fell for the third month in a row to $883m.

The decrease in credit-card use was seen as consistent with a recent bout of lacklustre consumer spending in the US.

Conversely, nonrevolving credit, a category that includes government student loans, auto loans and all credit that cannot be used again after repayment, is on the up. Following a $12.23bn increase in July, it climbed a further $14.51bn in August.

A survey of US and Canadian bank risk professionals conducted by analytics provider FICO and made public on the 9 October found that 46% of respondents expect consumer credit requests to increase, while 16% expect it to decrease.

Dr Andrew Jennings, chief analytics officer at FICO and head of FICO labs qualified recovery in the economy as ‘slow and steady’.

"Both consumer spending and income ticked up slightly during the summer. I’m sure that contributed to the feeling among our respondents that consumer borrowing is poised to increase. It remains to be seen if the government shutdown causes consumers to tighten their purse strings", he said.


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